Two big bankruptcies, one common buyer

[PartyOf5]

I was reading different articles about the bankruptcies of Toys R Us and iHeartmedia. While reading the second article, something looked familiar. Turns out, both companies went through leveraged buyouts with Bain Capital as one of the buyers. Not sure what kind of spin to put on it other than it is a bit surprising to see their name attached to both of these and the timing of them both being in the news in the same week.

TRU:
http://www.businessinsider.com/why-toys ... res-2018-3

Toys R Us then launched a turnaround plan that ended with the chain seeking buyers. Bain Capital, Kohlberg Kravis Roberts, and Vornado Realty Trust together invested $1.3 billion in a $6.6 billion leveraged buyout in 2005, taking Toys R Us private. This meant that the company had essentially been purchased by using its own equity, with the help of the private-equity cash.

This saddled Toys R Us with with an astronomical amount of debt — over $5 billion worth — and over a decade later, the company still hadn't shaken it. According to the filling with the bankruptcy court, Toys R Us was still making $400 million payments on its debt each year.

iHeartMedia:
https://www.npr.org/sections/thetwo-way ... bankruptcy

About 10 years ago, the amount paid for iHeartMedia, Inc. — $26.7 billion — was a particularly lofty example of a "leveraged buyout"; broadly, the term for purchasing a company by borrowing the money from banks, which issue those loans against the company's cash and assets. The buyout was led by Bain Capital, the private equity firm founded by Mitt Romney in 1984, and Thomas H. Lee Partners. It was funded by a consortium of banks — Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Royal Bank of Scotland and Wachovia.

[Martin Hash]

I’ve been saying this for years, Mitt Romney, and Bain Capital are truly Capitalist evil. They exploit the weaknesses of corporate governance to rape the stockholders and bankrupt the companies they “help.”

[Speaker to Animals]

Romney always struck me as a criminal.

[nmoore63]

If leveraged buy-outs actually worked, the company wouldn't need to be bought out in the first place.

[clubgop]

If leveraged buy-outs actually worked, the company wouldn't need to be bought out in the first place.

But that is the point. Who is getting hurt here? These weren't healthy companies to begin with. They are privately funded bailouts and unlike the government when that Hillary falls no one is going to prop that bitch up. 26.7 billion for a bunch of radio stations? Yeah no shit you overpaid and over leveraged.

[Martin Hash]

The intention is to take out massive loans to pay Bain for “consulting” then eventually default. Yeah, the only people hurt are the pensioners who financed those loans with their funds. (And the shareholders who get nothing.)

[Okeefenokee]

I’ve been saying this for years, Mitt Romney, and Bain Capital are truly Capitalist evil. They exploit the weaknesses of corporate governance to rape the stockholders and bankrupt the companies they “help.”

This was commonly mentioned when he was running. I thought everyone who was around back then knew about it.

[clubgop]

The intention is to take out massive loans to pay Bain for “consulting” then eventually default. Yeah, the only people hurt are the pensioners who financed those loans with their funds. (And the shareholders who get nothing.)

You describing Bain or your career in heath care because in my experience it sounds quite similar.

[Martin Hash]

The intention is to take out massive loans to pay Bain for “consulting” then eventually default. Yeah, the only people hurt are the pensioners who financed those loans with their funds. (And the shareholders who get nothing.)

You describing Bain or your career in heath care because in my experience it sounds quite similar.

???

[Martin Hash]

Guys who make vast sums of money leveraging the weaknesses of Capitalism at the expense of everyone else have way more credibility than me because money, no matter how acquired, beats achievement every time. (I learned that here.)